Cost Exam 2

  1. Measures the relationship between the actual number of output units produced and the budgeted (or desired) number of output units/
  2. Measures the relationship between manufacturing resources (inputs) used and the output units produced w/those resources (inputs).
  3. The cost of the resources that the managers expect to consume in order to produce a specified number of output units.
    Budgeted costs
  4. The amounts actually spent for resources consumed in the production of output units.
    Actual costs
  5. The effect (measured in dollars $$$) of the difference between a budgeted amount (cost or revenue) and an actual amount (cost or revenue).
  6. The costs of the resources that are assigned to the actual output units produced w/those resources.
    Applied costs
  7. A signal that is part of a control system for monitoring results.
  8. A variance provides a signal that op.s didn't....
    go as planned.
  9. Accountants focus separately on prices and quantities because in most organizations, one department is responsible for.... a resource and one department is responsible for.... the resource.
    acquiring, using
  10. If managers learn that cost changes are likely to be permanent, they can update their.... information.
    product cost
  11. A carefully predetermined price, quantity, or cost that is used as a benchmark for evaluating performance.
  12. The budgeted cost of 1 unit of product.
    standard cost
  13. 3 sources of standard costs.
    • 1. Specifications by engineers
    • 2. Previous performance
    • 3. Benchmark
  14. 2 philosophies of standard costs.
    • 1. Ideal
    • 2. Practical
  15. 4 uses for standard costs.
    • 1. Budgeting 
    • 2. Costing
    • 3. Evaluating performance
    • 4. Controlling costs
  16. 2 situations where you should investigate variances.
    • 1. High dollar amt.
    • 2. High percentage of the standard
  17. A measure of the sensitivity of op. income to a percentage change in sales.
    Op. leverage
Card Set
Cost Exam 2